Britvic's £1.4bn merger with AG Barr in doubt after being referred to competition authorities

Britvic's £1.4bn merger with its smaller rival AG Barr was cast into doubt last night after being referred to the competition authorities.

The Office of Fair Trading which has been analysing the tie-up set to throw together Scotland’s Irn-Bru, pictured, with Robinson’s Barley water warned the deal could distort the market and referred the proposal to the Competition Commission.

Doubt: The Office of Fair Trading warned the deal could distort the market

The unexpected blow could cause the two drinks makers to walk away.

Britvic’s chairman Gerald Corbett said: ‘We are bemused and unamused. Our merger is about two British companies getting together to strengthen themselves against a vast American conglomerate and now it has been chucked into the Competition Commission by the OFT. We will review this decision’.

The merger would bring to an end a troubled three years for Britvic, which had issued a string of profit warnings.